The Death Of BHS: An Irrelevance Crisis

11,000 staff, 164 stores, and a heritage dating back to 1928. That’s some estate, but as they enter administration, where did it all go wrong for BHS?

It has to be acknowledged that 2016 is not an easy time to be a retailer. Footfall is reported as being down as much as 10% in some cities, consumer behaviour and expectations change more regularly than ever, and the emergence of digital has given rise to unprecedented levels of competition. All of that having been said, BHS has not done itself any favours. In this piece we investigate what could have been done better to help keep the administrators at bay.


What exactly is BHS? What reason do people have to shop there? If the answer to that question isn’t short, snappy and immediately apparent for any retailer, they’re shooting themselves in the foot.  With a wide range of products spanning homeware, lighting, clothing and even groceries, their offering and position in the market isn’t immediately clear. That’s absolutely fine if something identifiably BHS is communicated via advertising, but it isn’t. They do not occupy a unique position in the market either in the products they offer or in how they’re perceived by consumers.

They haven’t been able to compete with Supermarkets on price and don’t come close to being as trendy as emerging online retailers such as Asos, Very and Boohoo. (The latter having just posted results with YOY sales and profit increases of 40%.) The very nature of pure play retailers allows them to stock wider ranges, satisfying the consumer appetite for greater choice.

Retailers with strong heritage are dealt challenges off the back of their earlier success. They are lumbered with bricks and mortar meaning that their focus is often deflected from trends and ranges as streamlining and profit lines take precedence. Indeed, BHS slashed its marketing budget by almost half last year, highlighting the fact that brand identity had fallen down the list of priorities.

Whilst it may be difficult in such tough times for retailers to justify marketing investment, it is the number one strategy that retailers can use to remain relevant and to convince consumers of their value. More than that, it allows them to cement their position in the market. For financial reasons they haven’t been able to invest in advertising over recent years, and historic campaigns have not successfully instilled lasting impressions of note.

With that in mind, let’s review an example ad from their last campaign in 2013. It mentions home and design but doesn’t set itself apart from its competitors. It doesn’t grab the attention of the user and certainly does not identify with any unique market position.

Compare that to the below ad, which is typical of what Boohoo have produced of late. It’s young, it’s relevant, it’s cool. They own trendiness, and that’s enough reason for people to shop there. It’s everything that represents what Boohoo is about, and it speaks to their audience. Their customers buy into the brand and proudly wear the badge. Would a BHS customer do that?

The combination of not being unique in its price offering while not satisfying consumer demand for wide ranges means that as a brand, BHS is floating in no man’s land. In the absence of substantial brand equity from previous campaigns, what they’ve really needed is real investment in their brand proposition, which obviously has not been possible given their financial situation. This has resulted in an irrelevance crisis, which only serves to compound their position as an investment proposition.


It’s challenging enough to encourage customers to choose your brand in the first place, so it is sloppy for retailers not to make the most of the opportunity to sweep up where demand and consumer intent exists. Making the most of these ‘moments’ manifests itself in a number of forms, but one key shortcoming of note has been in-store experience.

BHS has been slow to innovate and have been left in the shadows by the likes of M&S and John Lewis who have invested heavily in omni-channel experiences. The technology in leading department stores allows customers access to a world of research, making the experience much more user friendly. Now that consumers expect that functionality, it has become a must-have part of their shopping experience.  

Unfortunately for BHS the sentiment in the above tweet is not in isolation. The collective feeling towards BHS is one of irrelevance. It has been left in the dark ages and consumers have voted with their feet. They’ve struggled to attract consumers in the first place due to having no place in the market, and this has been compounded by 90’s style store layouts and a lack of investment in innovation and tech.


BHS could also have made much more of the opportunity to attract and convert in-market consumers online. Apart from the obvious – generating increased sales through their e-commerce platform – sound search engine strategy plays a crucial part in attracting and retaining customers.

bhs keywords

With only 8,000 keywords in the top 3 results on Google compared with John Lewis’ 70k+, you can see how BHS have missed a trick and a quick win for increasing online revenues.

However, retail websites should not be regarded simply ‘one more store’, or a way to make a bit of extra revenue. Retail sites are extensions of the brands they represent and are therefore an opportunity to immerse consumers in brand experiences. It isn’t just about driving sales. It’s about providing consumers the opportunity to research online and make in-store purchases. BHS was slow to integrate click-and-collect into their offering which is typical of their failure to provide positive consumer experiences.

Bearing this in mind against the back drop of John Lewis investing £1 million every month to fend off the likes of Amazon, you really get a sense of the importance top players in the retail market place on capturing consumers as they research and make purchases online. The implications of good search performance expand way beyond e-commerce performance for retailers. BHS only really started to spend on paid search in Q4 2014, never spending over £30,000 in a month and spending nearer £10,000 per month this year. These facts really do hammer home just how far behind the times BHS is.

Overall the slow adoption of digital by BHS is typical of their inability to adapt to consumer expectations. Their financial situation didn’t allow them to own a place in the market at a time when similar competitors were innovating and pure play retail brands were diversifying consumer tastes. Meanwhile, their online offering failed to attract customers which compounded their issues further.

Ultimately BHS suffered an irrelevance crisis, and that’s what killed them. To wrap up, and in keeping with the 80’s (where BHS have been left stranded), what was that Buggles tune again? Ah yes –  ‘Digital Killed The Retail Star!’